Marcus: Testing Hoosier’s Economic Development Policies | Opinion
Last week in that space, data showed Indiana performed well relative to most other states in the COVID-19-induced economic decline and rebound of 2020-21. Today, let’s consider a longer period, from 2007 to 2019.
Why this 12-year period? 2007 was the last year before the financial meltdown called for massive and innovative stimulus measures. 2019 was the last year before the global COVID pandemic from which we are still recovering.
While the short term is important, the longer period tests our state’s economic development policies. Jobs are the favorite economic topic of discussion for many politicians. How did Indiana add jobs from 2007 to 2019?
Nationally, the number of jobs increased 9.3% and 6.0% in Indiana. But this national figure gives more weight to large states than to smaller ones. So, without California and Texas, and their combined growth rate of 17.8%, the national rate fell from 7.4% to 9.3%.
However, the median employment growth rate for the 50 states was a modest 5.8%. Looked at that, Indiana’s 6.0% rate was just above that median and the nation’s 23rd. This allows professional blowers in our state to proudly proclaim, “We are in the top half of all states. “
The story is different when you consider employee compensation, which has two components: wages and salaries plus employer-paid supplements. The latter includes the amount paid by employers for health, unemployment and disability insurance, as well as other benefits paid by employers on behalf of employees.
In 2007, the average wage for workers in Indiana was $ 47,388, the 31st highest in the country and 14% lower than the national average of $ 54,969. A dozen years later, in 2019, average compensation for Hoosier workers was $ 61,262, excluding inflation. This is a drop to 35th place among states, and 16% below the US average of $ 72,981.
So while our job growth rate (6.0%) was a respectably poor 23rd nationally, our labor compensation dollar growth ranked 44th nationally, at $ 13,874. .
It is true that Indiana’s average earnings growth rate was 29.3%, while the nation achieved a growth rate of 32.8%. This puts us just 3.5 percentage points behind the average US growth rate.
“Chic, it wasn’t worth sneezing,” many members of our sleepwalking General Assembly would say.
However, the Hoosiers know that percentage points don’t shop for groceries, pay the mortgage, or pay utility bills. It takes money to do these things, and the average Hoosier employee in 2019 was $ 11,719 less than the average American employee.
And, please don’t spit out that oft-repeated excuse, “The cost of living in Indiana is lower than elsewhere, so we’re okay with lower compensation.” In truth, the cost of living is largely determined by house prices, which turn out to be closely related (expect it) to the compensation of employees.